The Laetoli Footprints

question 30

Multiple Choice

The Laetoli footprints

• A) appear to have been made by a hominin with a striding gait and short, straight toes.
• B) fit perfectly with the reconstructed foot anatomy of Au. Afarensis.
• C) were probably made by Homo habilis.
• D) were probably made by Homo erectus.

Understand the principles of the Fama-French Three Factor Model and its application in calculating expected stock returns.

Grasp the concept of the Arbitrage Pricing Theory (APT) and the assumptions underlying multifactor models.

Apply multifactor models to compute expected returns on portfolios, considering various risk premiums and betas.

Identify arbitrage opportunities by comparing the expected returns and the actual returns of portfolios.

---

Definitions:

Permanent Working Capital

The minimum amount of working capital a company needs to sustain its daily operations continuously.

Aggressive Working Capital Policy

A strategy involving higher levels of current assets relative to liabilities, aiming for growth but increasing liquidity risk.

Short Term Financing

Borrowing funds for a period typically less than one year, often used to cover gaps in cash flow or finance immediate expenses.

Temporary Working Capital

Additional working capital required to support the fluctuating operational needs of a business beyond its permanent working capital.